Market Update

General - Mineral Resources/Fortescue

Good afternoon

first Quarter GDP-estimate got slightly increased - inflation hardly existent - but I guess that´s nota  surprise, given the oil price recently. In Europe, consumer confidence continues to be at record levels, and inflation has slightly increased.

Hamburg is preparing for the G-20...15.000 police there - 220 of them got sent home already, as they spent their waiting time for the big event partying, drinking and misbehaving among themselves! Very funny story!

The bond sell-off gathering pace in Europe - German bunds are tarding at 0,43% yield, which is the highest since March last year. 

Equities don´t like that - and they don´t like the weak US$ either...contraty to base metals, which are very strong again. Copper is less than 50$ away from the magical 6000$-mark. The highest close since May last year has been just 10$ higher back in March .Don´t ask me, why gold is 10$ weaker at 1242 in the moment - I guess falling bond markets are the biggest influence today.

Mineral Resources - interesting announcement oday by this company, which is a significant producer of iron ore, lithium and a large mining services company. They have reduced their guidance for the 2017 financial year based on the recent weakness of iron ore, and the stregth of the A$. Both have been going into the wrong direction - even though iron ore has recovered quite dramatically over the last 3 days. New guidance is about 8% lower to just under 500 Mill A$ EBITDA. The interesting part of the announcement has been their statement, that the discount for iron ore with lower grades than the 62%-benchmark material, has attracted a discount of 35% as compared to the expected 25%. This does also affect Fortescue - but FMG alleviated concerns by guiding for cash costs of only 12-13 US$/t. This is another 2-3$ fall from last year. Amazing!

I fear, there is nothing much happening today elsewhere in terms of micro-news! 30th of June and the end of the financial year / tax-year for just about every company and all individuals are dictating the flows - or better non-flows!

have a nice evening!


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